Due to the limitations of satellite antenna technology, current operational microwave soil moisture (SM) data products are typically at tens of kilometers spatial resolutions. Many approaches have thus been proposed to generate finer resolution SM data using ancillary information, but it is still unknown if assimilation of the finer spatial resolution SM data has beneficial impacts on model skills. In this paper, a synthetic experiment is thus conducted to identify the benefits of SM observations at a finer spatial resolution on the Noah-MP land surface model. Results of this study show that the performance of the Noah-MP model is significantly improved with the benefits of assimilating 1 km SM observations in comparison with the assimilation of SM data at coarser resolutions. Downscaling satellite microwave SM observations from coarse spatial resolution to 1 km resolution is recommended, and the assimilation of 1 km remotely sensed SM retrievals is suggested for NOAA National Weather Service and National Water Center.